House Proposes Federal Fuel-Tax Hike: Will the Money Go Where It’s Supposed To?

In a perfect nation, higher taxes would guarantee higher levels of service. But for a U.S. government that attempts to serve more than 317 million people, that common sense often doesn’t apply. That’s why a proposed federal gas tax hike and a potential mileage tax may not do much to help our roads, at least not without a heavy audit of the Treasury’s books.

U.S. Rep. Earl Blumenauer (D-OR) introduced two bills this week that would increase the federal gasoline tax to 33.3 cents per gallon and diesel to 39.3 cents per gallon by 2016. He also proposed $35 million in grants to study the rollout of a national mileage tax, just months after Oregon state Rep. Vicki Berger called for a pilot program that would install GPS tracking devices on 5000 cars.

Congress hasn’t increased the fuel tax since 1993, when it went up 4.3 cents to 18.4 cents for gasoline and 24.4 cents for diesel. Only in the past few years has a mileage tax come up in conversation. In 2009, then transportation secretary Ray LaHood suggested a mileage tax, only to be quickly rebuffed by the White House. Two years later, the Congressional Budget Office drafted a mileage tax report at the behest of Sen. Kent Conrad (D-ND) and in January, the Government Accountability Office went into more detail, proposing a tax up to 2.2 cents per mile.

Indeed, the Federal Highway Trust, set up in 1956 to fund support and repairs to the then-new interstate system for decades to come, is running on empty. The fund’s $3.8-billion balance through September was down 61 percent year over year and more than $15 billion short from the same time in 2010. Proponents of higher gas and road taxes say that more revenue will keep the fund afloat—instead of bailing it out with other tax dollars—and offset the decrease in fuel-tax collection that is likely to come from toughening fuel-economy laws. Then—poof!—all the crumbling bridges can be repaired and other necessary projects will run their course.

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That’s hard to fathom. For decades, Congress has pilfered the Highway Trust Fund for all sorts of non-federal highway projects—public transit, bike lanes, rails to trails, or roads that don’t have any federal significance—that have stretched the trust beyond its original intent. It’s the same problem with toll roads, in which drivers are forced to pay for state projects that have nothing to do with the roads they’re using. What would prevent Congress from transferring more money to non-road projects from these higher taxes, only to again claim that the Federal Highway Trust is running dangerously low?

It’s shameful, but rarely do “user” taxes fully support the programs and services they’re advertised to serve, since lawmakers have a habit of diverting revenue and burying any changes in piles of incomprehensible legislation. Higher fuel and road taxes, no matter what benefits they could bring, could be seen as a direct salvo to average workers in a sluggish economy—who, after billions spent on public transit, still have to drive to their jobs. It’s another blow to civil liberties should government-mandated tracking devices be installed in all cars (and these days, we know this technology can and will be misused). But more than anything, it would be misleading to raise taxes on drivers without telling them exactly how and where their money would be spent; if we’re expected to support a gas tax, this issue must be addressed transparently. And if those higher taxes still aren’t going to the highways they’re supposed to, then the Highway Trust should, for some shred of honesty, be renamed.